Blog Post

Will We Finally See Service Bars On The London Underground? Huawei Hopes So

One by-product of travelling to a different city — for example, Barcelona last week — is that it serves as a reminder that not everyone has to lose mobile connectivity when travelling on the city subway service, as we do on the London Underground. Now it looks like London may be catching up with the rest, and we may have Chinese vendor Huawei to thank for it.

According to reports from the Sunday Times and the FT, Huawei is in the shortlist — in fact, believed to be the only bidder — to supply network equipment for a mobile network to run on the London Underground, a project that has been discussed for years now but has never come to fruition. The idea now is to try to get this network up and running before the London Olympics in 2012.

The Chinese vendor is understood to be offering £50 million ($80.7 million) worth of equipment towards the deal, which would apparently cost over £100 million ($161 million) in total. The network would be installed and serviced by the French IT systems behemoth Thales in partnership with UK mobile operators.

In any case, the London Underground’s operator Transport for London confirmed to the FT that the network would need to be financially self-sufficient: “Given the financial pressures on TfL’s budgets, any solution would need to be funded through mobile operators with no cost to fare- or taxpayers,” it said in a statement.

But before anything has been confirmed, it looks like there are already some hiccups:

Huawei already is a major network equipment supplier to the UK’s largest telco, BT (NYSE: BT), but this project will highlight the Chinese vendor’s increasing role in UK communication networks for those not keen to see its role grow anymore — although it is important to point out that there have not been any reasons to question privately-owned Huawei’s role to date.

The company has made major headway in breaking into network contracts in markets outside of China, with a combination of strong products, low prices and, in some cases, unbeatable vendor financing terms. But in some markets entry has not been without problems:

Huawei has been in the middle of controversy in the U.S. over questions of national security: Huawei was barred by authorities from acquiring the assets of server company 3Leaf Systems, and as of last week pulled out of the deal. Last year, Sprint (NYSE: S) said it would exclude Huawei and fellow Chinese vendor ZTE from bidding in its big network upgrade project. Huawei has also put itself in the middle of the acquisition of a sale of Motorola’s network business to *Nokia* Siemens Networks.

Separately, phone comparison website Good Mobile Phones put out some instant stats on what the public think about mobile networks on the Undergound: three-quarters of people polled are against the idea of a mobile network on the Underground (via the Telegraph), with only one in four respondents saying that it would increase safety on the network.